The share of imported gas in Uzbekistan surged from $50.4mn in 2020 to $695mn in 2023, reflecting a growing dependency on external sources to meet domestic demand.
Unforeseen Downtrend in Gas Production
Uzbekistan's natural gas production has witnessed a steady decline over the years, culminating in a notable decrease in 2023. With only 46.7bn m³ mined—the lowest in seven years—the country faced a shortfall of 9.7bn m³ compared to 2017 figures. Uzbekneftegaz, the leading gas producer, grapples with the challenge of reversing this trend amidst dwindling reserves.
Forecasts indicate a further decline in gas production by Uzbekneftegaz, with estimates suggesting a reduction to 70% of the previous year's output in 2023. Despite concerted efforts to boost production, the company faces hurdles in meeting targets, projecting a production volume of 29.3bn m³ in 2024—nearly 3bn m³ lower than the preceding year.
Investment Infusion to Revitalize Production
To address the shortfall in gas production, Uzbekneftegaz has embarked on an investment program, earmarking funds for exploration, drilling, and infrastructure upgrades. With investments totaling billions of dollars, the company aims to enhance well productivity, undertake geological surveys, and modernize existing facilities to optimize production capabilities.
The revelation by Ulug'bek Nazarov, chairman of Uzbekneftegaz, underscores the challenge of depleting reserves in key gas fields. Despite significant past extraction, sizable portions of reserves remain untapped, necessitating innovative approaches to maximize extraction efficiency.
Escalating Gas Imports and Infrastructural Overhauls
As domestic production wanes, Uzbekistan has turned to increased gas imports to bridge the supply-demand gap. Notably, gas imports surged to $694.9mn in 2023, signaling a reliance on external sources to meet energy needs. The initiation of gas imports from Russia through the "Central Asia-Center" pipeline underscores efforts to diversify supply channels and ensure energy security.
To accommodate rising import volumes, Uzbekistan is undertaking extensive modernization of its gas transmission infrastructure. With substantial investments allocated to upgrade pipelines and pumping units, the country aims to enhance transmission capacity and optimize efficiency in gas distribution.
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